M&A activity within the sector continued to lag prior years on an overall deal value and volume basis. Q4 2018 was a bright spot in the year with two significant transactions announced, driving average deal size to its second highest levels in 12 quarters. Continued geopolitical uncertainty, despite positive underlying sector fundamentals, are driving more muted M&A levels. Entering the new year, the fundamentals remain favorable at a sector level. These, combined with strong corporate balance sheets, record levels of dry powder and stable debt markets, are supportive of continued M&A momentum.
“M&A values picked up significantly in Q418 buoyed by two significant transactions. Despite decreases in overall year-over-year activity, the underlying sector fundamentals remain strong and further supported by favorable availability of capital.”